Obtimistic review at Vietnam’s economy in 2014

01/12/2014

Vietnam will likely obtain higher gross domestic product
(GDP) growth in 2014 based on strong exports and low inflation so far this
year, according to Hong Kong and Shanghai
Banking Corporation (HSBC). Experts said economic index in the first nine
months of this year show positive prospects for Vietnam’s economy in 2014 as well
as some following years.

The Gross Domestic Product (GDP) in Vietnam expanded 6.19 percent in
the third quarter of 2014 over the same quarter of the previous year. The
government is expected to meet this year’s economic growth target of 5.8%.
Government data showed GDP in the first nine months of this year grew 5.62%
from a year earlier. Growth in the third quarter was 6.19%, quickening from 5.42%
in the second quarter and 5.09% in the first quarter.

Vietnam's export performance has been enviable as the sector
has expanded by 14.1 percent since early this year, an impressive result amid
lackluster demand across the globe, local Saigon Times daily quoted sources
from the bank's Global Research Report as saying on Tuesday.

Some German
newspapers recently ran articles hailing Vietnam’s economic achievements and
growth prospect as well as the active role played by the country in the
Association of Southeast Asia Nations (ASEAN).

The Dusseldorfer
Abendblatt newspaper and the website Pressportal.de took note that Vietnam enjoyed
a fast economic growth of 7-8 percent per year after the country applied its
renewal policy and shifted to a market economy.

Vietnam also quickly recovered from the impacts of the
financial crisis in 2008-09 and over the last three years, the Vietnamese
government successfully made use of macroeconomic stabilization policy, thus
keeping a high economic growth at 5-6 percent per year, attracting 23 billion
USD in foreign direct investment (FDI) in 2013, contributing to promoting the
national economic development.

Vietnam’s inflation rate has dropped from over 20 percent in
2010 and 2011 to only 6 percent in 2013, while its trade balance continued
recording a surplus, with export turnover hit over 132 billion USD and import
turnover was at 131.3 billion USD last year.

Vietnam has been working hard to improve its business
environment; its recent actions have included such measures as slowly reforming
its financial sector, streamlining business regulations, and improving the
quality of its workforce. The country’s low-cost human resources are a crucial factor that has driven
businesses to move their operations to Vietnam. It is not just the
government seeking to improve the workforce, private companies are also
pitching in.

In the third
quarter, the economy accelerated on the back of a strong industry. Recent
economic data show that the Vietnamese economy is growing at a brisk pace. In
fact, in October, retail sales accelerated over the previous month, which bodes
well for private consumption in the last quarter of the year.

Analysts also highlighted Vietnam’s
efforts to integrate into the global economy by joining many economic organizations
in the world such the World Trade Organisation, the International Monetary Fund
(IMF) and the ASEAN Free Trade Area (AFTA).

With ongoing
negotiations in the Trans-Pacific
Partnership, the situation looks highly beneficial. Upon successful
ratification, trade barriers will decrease significantly between the U.S. and Vietnam,
a ground-breaking advantage over China, which is not included in the
TPP. When combined with the fact that the average Vietnamese manufacturing
worker is more skilled, Vietnam
appears set to be a serious competitor to Chinese manufacturing in the future.

Vietnam plays a crucial role in ASEAN, a region with a 560
million population and about 800 billion USD in GDP. Vietnam
is a developing economy in the Southeast Asia.
In recent years, Vietnam
has been rising as a leading agricultural exporter and an attractive foreign
investment destination. Vietnam's
key products are: rice, cashew nuts, black pepper, coffee, tea, fishery
products and rubber. Manufacturing, information technology and high-tech
industries constitute a fast growing part of the economy. Vietnam is also
one of the largest oil producers in the region. Vietnam along with other ASEAN
member nations agreed to accelerate regional economic integration through the
formation of an ASEAN economic community by 2015.

Thanks to flexible
economic policies and a stable political situation, Vietnam is now one of the leading
investment destinations in ASEAN, however we need to resolve several issues
related to rising public debt and bad debt in its financial and banking system.

We are targeting gross domestic product growth of 6.2%
for 2015, faster than projected growth of 5.8% for this year, Prime Minister
Nguyen Tan Dung said during the opening session of the country’s National
Assembly. Mr. Dung said exports in the first nine months of this year grew
14.4% while banks’ lending interest rates have fallen by around two percentage
point year-to-date./.

Vietnam plays a crucial role in ASEAN, Vietnam is a developing economy in the Southeast Asia. In recent years, Vietnam has been rising as a leading agricultural exporter and an attractive foreign investment destination.

Vietnam needs to improve its business environment; its recent actions have included such measures as slowly reforming its financial sector, streamlining business regulations, and improving the quality of its workforce.